Analysis and translation of Kitab Al-Mudarabah of Al-Mabsut by Al-Sarakhsi (d.483/1090)

Abstract

Mudarabah is a contract of profit-sharing known as partnership in capital and labor. Its concept and practices were notable in the history of Muslims specifically after its incorporation in the fiqh literatures that have spread to the entire education and economic institutions in the Muslims world. It combines two parties; those who have capital and those who are skilful in business to achieve a common economic objective underpinned by the S h a n ‘ah. This study analyzes the work of al-Mabsiit by al-Sarakhsi (d. 483 A.H./1090 A.C.), an accomplished Hanafi jurist (faqili) in fifth/eleventh century, pertaining to mudarabah drawn from the translation and analysis of the first chapter of the book entitled Kitab al-Mudarabah. This study is significant as it fills the lacuna in the historiography of Islamic economic thought by focusing on al-Sarakhsi’s definition of mudarabah, the concept of currency as a form of capital (ra ’s al-mal), the spirit of cooperation and mutual respect in mudarabah, the role of individual and the investment and distribution of profit. It is a testimony of how the Muslims conducted their economic activities based on the intellectual framework and moral guidance underlined by the Shari‘ah. This study has discovered that mudarabah was integral in individual and societal dynamics and Islam does provide a coherent vision and concept of economics in contrast to modem economics.